SF 5118

Introduction - 94th Legislature (2025 - 2026)

Posted on 04/15/2026 09:07 a.m.

A bill for an act
relating to taxation; authorizing certain jurisdictions to impose various taxes.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. new text begin TEMPORARY AUTHORIZATION; LOCAL TAXES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "City of the first class" has the meaning given in Minnesota Statutes, section 410.01.
new text end

new text begin (c) "Commissioner" means the commissioner of revenue.
new text end

new text begin (d) "Eligible jurisdiction" means:
new text end

new text begin (1) Hennepin County; or
new text end

new text begin (2) any city of the first class located in the metropolitan area.
new text end

new text begin (e) "Metropolitan county" has the meaning given in Minnesota Statutes, section 473.121,
subdivision 4.
new text end

new text begin (f) "Resident" has the meaning given in Minnesota Statutes, section 290.01, subdivision
7, except that "eligible jurisdiction" applies instead of "Minnesota."
new text end

new text begin Subd. 2. new text end

new text begin Sales and use taxes; authorization. new text end

new text begin (a) Notwithstanding Minnesota Statutes,
sections 477A.016, 297A.99, or any other law, ordinance, or city charter provision to the
contrary, an eligible jurisdiction may impose by ordinance a sales and use tax of up to one
percent. The provisions of Minnesota Statutes, section 297A.99, govern the imposition,
administration, collection, and enforcement of the tax authorized under this subdivision.
The tax authorized under this subdivision is in addition to any local sales and use tax imposed
under any other special law.
new text end

new text begin (b) The authority to first impose a tax under this subdivision expires July 1, 2029. An
eligible jurisdiction may only impose a tax under this subdivision for a consecutive period,
which must not exceed 36 consecutive months beginning on the first day of a calendar
quarter.
new text end

new text begin Subd. 3. new text end

new text begin Income and corporate franchise taxes; authorization. new text end

new text begin (a) Notwithstanding
Minnesota Statutes, section 477A.016, or any other law, ordinance, or city charter provision
to the contrary, an eligible jurisdiction may impose the taxes authorized under paragraphs
(b) and (c). The tax authorized under this subdivision is in addition to any local tax imposed
under any other special law.
new text end

new text begin (b) An eligible jurisdiction may impose by ordinance a tax of up to one percent on the
taxable income for each taxable year of corporations that produce gross income in an eligible
jurisdiction attributable to sources within the eligible jurisdiction. The provisions of
Minnesota Statutes, chapter 290, govern the administration, collection, and enforcement of
the tax authorized under this subdivision.
new text end

new text begin (c) An eligible jurisdiction may impose by ordinance a tax of up to one percent on the
taxable income for each taxable year of resident and nonresident individuals in an eligible
jurisdiction. The provisions of Minnesota Statutes, chapter 290, govern the administration,
collection, and enforcement of the tax authorized under this subdivision.
new text end

new text begin (d) The commissioner must collect the taxes imposed under this subdivision. The
commissioner may collect the tax with the state income and corporate franchise tax imposed
under Minnesota Statutes, chapter 290. All taxes under this subdivision are subject to the
same penalties, interest, and enforcement provisions as apply to the state income and
corporate franchise tax imposed under Minnesota Statutes, chapter 290.
new text end

new text begin (e) A tax imposed under this subdivision must only first be effective for the taxable year
beginning after December 31 immediately following the year the tax is imposed. An eligible
jurisdiction may only impose a tax under this subdivision for a consecutive period, which
must not exceed three consecutive taxable years. The authority to impose a tax under this
subdivision expires January 1, 2030, for taxable years beginning after December 31, 2029.
For purposes of this section, "taxable year" means a calendar year.
new text end

new text begin Subd. 4. new text end

new text begin Use of revenues. new text end

new text begin (a) The commissioner must deposit the tax revenues, including
interest and penalties, from the taxes authorized under subdivisions 2 and 3 in the general
fund.
new text end

new text begin (b) The amount deposited under paragraph (a) is annually appropriated to the
commissioner of health for payments, as determined by the commissioner of health, for:
new text end

new text begin (1) a private, nonprofit hospital located in the city of Minneapolis designated by the
commissioner of health as a level I trauma hospital according to Minnesota Statutes, section
144.605, subdivision 3; and
new text end

new text begin (2) otherwise uncompensated care provided by a private, nonprofit hospital located in
an eligible jurisdiction.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2026, without local approval,
pursuant to Minnesota Statutes, section 645.023, subdivision 1, clause (a).
new text end